Fla. Tomato Growers Say Mexico Trade Deal Is Rotten

Half of all tomatoes eaten in the U.S. come from Mexico, and tomato growers in Florida aren't happy about that. In fact, they're willing to risk a trade war to reverse the trend.

At JC Distributing In Nogales, Ariz., one misstep and you're likely to get knocked over by a pallet full of produce. Forklifts crisscross each other carrying peppers, squash and especially tomatoes from trucks backed into the warehouse loading dock.

"This is a Mexican truck being unloaded," says JC President Jaime Chamberlain. "He's just waiting for his paperwork to get back."

JC is one of a number of produce distributors just north of the Mexican border. Chamberlain says his company alone handles more than 87 million pounds of tomatoes each year — tomatoes sold in stores across the country.

"This is a box of grape tomatoes, and this is from a grower of ours in Jalisco," Chamberlain says.

For 16 years, the Mexican growers have agreed not to sell tomatoes below what's called a reference price. That was supposed to protect Florida tomato growers from cheap Mexican tomatoes.

But Florida sales have dropped in half anyway, to as little as $250 million a year, while Mexican sales have tripled to more than $1.8 billion.

Reggie Brown, who heads the Florida Tomato Exchange, says Mexican growers have been dumping tomatoes — selling them for less than it costs to produce them.

"The Mexican industry has for significant periods dumped product into the U.S. market during the 16 years of the agreement," Brown says.

So Florida growers are pushing the Obama administration to end the price agreement.

"What would happen if the suspension agreement went away is free trade would truly exist between Mexico and the U.S. in the tomato industry," Brown says.

Lance Jungmeyer, who heads the Fresh Produce Association of the Americas, which represents the Mexican tomato industry, says Mexico is not dumping tomatoes.

"It would be impossible to sustain hundreds perhaps thousands of Mexican tomato companies for years on end selling below their cost. They wouldn't be able to do that," Jungmeyer says.

If the tomato agreement goes away, though, Florida would be free to file an anti-dumping case against Mexico. If that happens, the Commerce Department can impose punitive tariffs on Mexican tomatoes — making them much more expensive and giving Florida an edge.

Mexico could then put heavy tariffs on billions of dollars in products the U.S. sells there: pork, beef and corn. It would be a trade war.

Jungmeyer says what's really going on is that consumers just plain prefer Mexican tomatoes — tomatoes ripened on the vine instead of with ethylene gas, which he says Florida growers use.

"If your choice is a tomato that doesn't really taste like a tomato or a tomato that tastes like a tomato, you want the tomato that tastes like a tomato," Jungmeyer says.

Gary Hufbauer, a senior fellow with the Peterson Institute for International Economics, a Washington, D.C., think tank that supports international free trade, agrees. He says the Mexican tomato industry has innovated, and Florida growers are hanging on.

But Florida voters are important, and no administration wants to be seen as responsible for losing jobs there. Even if, as Hufbauer says, Florida's future isn't in tomatoes, it's a symbolic industry.

"The mental image of the little house on the prairie has most of us captivated in Florida; the little house on the prairie is a tomato grower, a sugar grower or an orange grower — a small part of the economy, but a big part of the popular imagination," Hufbauer says.

Ending the tomato agreement would cost jobs in Mexico and the U.S., says distributor Jaime Chamberlain.

"Your packaging, your marketing, your advertising, your transportation is tremendous. I don't know what would happen to all these trucks on the American roads if you were to eliminate a specific commodity out of the Mexican agricultural deal," Chamberlain says.

Negotiations are continuing, but last fall, the Commerce Department indicated it was siding with Florida. A number of big produce buyers, including Wal-Mart, are siding with Mexico. The trade agreement is set to expire at the end of this month.

What's at stake are higher prices and fewer tomato choices. Of course, you could grow your own.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

Transcript

STEVE INSKEEP, HOST:

You can learn a lot about the world by following the story of a humble tomato - from the vine to your hamburger or salad. Tomatoes are a staple part of the American diet. More than half of all the tomatoes consumed in the United States come from Mexico. Mexican tomato imports have risen dramatically in recent years. Growers in Florida are not happy about that and that is today's business bottom line.

Here's NPR's Ted Robbins.

TED ROBBINS, BYLINE: One misstep at J-C Distributing and you're likely to get knocked over by a pallet-full of produce. Forklifts crisscross each other, carrying peppers, squash, and especially tomatoes from trucks backed into the warehouse loading dock.

JAIME CHAMBERLAIN: Yes, this is a Mexican truck being unloaded. He's just waiting for his paperwork to get out and get back. We have U.S. trucks here, U.S. trucks here...

ROBBINS: Jaime Chamberlain heads JC Produce in Nogales, Arizona. It's one of a number of produce distributors just north of the Mexican border. Chamberlain says his company alone handles more than 87 million pounds of tomatoes each year - tomatoes sold in stores all over the country.

CHAMBERLAIN: This is a box of grape tomatoes and this is from a grower of ours in Jalisco.

ROBBINS: For 16-years, the Mexican growers have agreed not to sell tomatoes below what's called a reference price. That was supposed to protect Florida tomato growers from cheap Mexican tomatoes.

But, Florida sales have dropped in half, anyway, to as little as $250 million a year while Mexican sales have tripled to more than $1.8 billion.

Reggie Brown heads the Florida Tomato Exchange. He says Mexican growers have been dumping tomatoes - selling them for less than it cost to produce them.

REGGIE BROWN: The Mexican industry has, for significant periods, dumped product into the U.S. market during the 16 years of the agreement.

ROBBINS: So Florida growers are pushing the Obama Administration to end the price agreement.

BROWN: What would happen if the suspension agreement went away, is free trade would truly exist between Mexico and the U.S. in the tomato industry.

LANCE JUNGMEYER: It would be impossible to sustain hundreds, perhaps thousands of Mexican tomato companies, for years on end, selling below their cost. They wouldn't be able to do that.

ROBBINS: If the tomato agreement goes away, though, Florida would be free to file an anti-dumping case against Mexico. If that happens, the Commerce Department can impose punitive tariffs on Mexican tomatoes - making them much more expensive and giving Florida an edge.

Mexico could then put heavy tariffs on billions of dollars in products the U.S. sells there -pork, beef, corn. It would be a trade war.

JUNGMEYER: If your choice is a tomato that doesn't really taste like a tomato or a tomato that tastes like a tomato, you want the tomato that tastes like a tomato.

ROBBINS: Gary Hufbauer agrees. Hufbauer is a senior fellow with the Peterson Institute for International Economics, a D.C. think tank which supports international free-trade. He says the Mexican tomato industry has innovated and Florida growers are hanging on. But Florida votes are important and no Administration wants to be seen as responsible for losing jobs there. Even if, as Gary Hufbauer says, Florida's future isn't in tomatoes, it is a symbolic industry.

GARY HUFBAUER: The mental image of the little house on the prairie has most of us captivated. In the case of Florida, the little house on the prairie is a tomato grower, a sugar grower or an orange grove - a small part of the economy, but a big part of the popular imagination.

ROBBINS: Ending the tomato agreement would cost jobs in Mexico and the U.S. Distributor Jaime Chamberlain.

CHAMBERLAIN: Your packaging, your marketing, your advertising, your transportation is tremendous. I don't know what would happen to all these trucks on the American roads if you were to eliminate a specific commodity out of the Mexican agricultural deal.

ROBBINS: Negotiations are continuing, but last fall, the Commerce Department indicated it was siding with Florida. A number of big produce buyers, including Wal-Mart, are siding with Mexico. The trade agreement is set to expire at the end of this month.

What's at stake are higher prices and fewer tomato choices. Of course, you could grow your own.